TORONTO - Weak print advertisement revenues weighed heavy on Postmedia's fourth quarter results, and the media company doesn't expect any improvement next year, as it works to turn around its operations.
The owner of several big city newspapers, including the National Post, Vancouver Sun and the Ottawa Citizen, said
losses from continuing operations deepened to $35.8 million in the fourth quarter, or 89 cents per share.
That compares to a loss of $28.4 million, or 70 cents per share, in the same period a year earlier.
Postmedia (
TSX:T.PNC.B,
Stock Forum) said revenues slid to $169.3 million from $190.1 million.
Much of the decline was driven by lower print advertising revenues, which fell 16.2 per cent in the three month period, with the weakness stretching across all of its major advertising categories.
National print advertising fell 20.3 per cent, while retail ads dropped 14 per cent, classified were down 16.7 per cent, and insert ads declined 7.3 per cent.
“We anticipate the print advertising market to remain challenging and expect current trends to continue into fiscal 2014,” the company said in its financial documents.
Quarterly revenues from sales of its newspapers dropped 3.6 per cent, it said.
Postmedia has been cutting costs across its operations as part of a three-year program to transform its money-losing business.
For the year, the company says it has managed to reduce operating costs by about 12 per cent, or $82 million.
In August 2013, the Company entered into a print outsourcing agreement for the production of the Calgary Herald newspaper commencing in November, 2013. In addition, on September 9, 2013, the Company announced its intention to sell two of its real estate holdings: a printing facility in Surrey, BC and the Calgary Herald building in Alberta.
“This past year was one of accelerated transformation for our industry and our Company,” said Paul Godfrey, President and Chief Executive Officer. “We have changed the overall design of our organization from local silos to a functional reporting structure, had important conversations with various stakeholders from unions and employees to advertisers and readers, and made progress rationalizing our real estate portfolio. With significant progress made on our structure, our teams are better equipped to focus on differentiated product offerings, deepening relationships with our audiences and effectively monetizing these offerings and insights.”
Postmedia rose from the ashes of bankrupt media company Canwest when Postmedia CEO Paul Godfrey culled together a group of investors in 2010.
Since then, the company has been focused on reworking its operations to reduce costs and refocus with a priority on its digital businesses, which include the National Post website.
Some of those changes have included layoffs and buyouts, though the company said those types of expenses were slightly lower in the quarter at $10.7 million, a decrease of $2.3 million.
Last month, the company announced it decided to close its Vancouver-area printing plant, a move that comes after it shuttered an in-house wire service last year and expanded its Hamilton operations to handle the editorial production of newspaper pages. Some of those changes included layoffs.
In July, Moody's Investors Service downgraded Postmedia's rating to negative from stable due to the media company's declining cash flow as it transitions to a digital business. Moody's said the company will face revenue pressure because print revenue is declining faster than digital revenue is increasing.